Of course, if the coins are used to buy gold or silver, which are not comoodities or stocks, then this complicates things further. What basis do we use now? My thoughts on this would be that the basis rolls over and you will still have to recognize gains on the liquidation of the gold or silver.
My thought is though, what if you buy gold or silver and then put it into an RIA? These grow nontaxable, and lead me to believe that by doing this you can grow your investment tax free and then only have to recognize the gains when you start drawing from it. This is just a thought that I had, not sure if it is possible or not or how it would be viewed.
I'm not ignoring mining, but I'm not that worried about it for the moment - the easiest option for it is to still treat it like any commercially produced product with a given rate of input (hardware, percentage of mortgage if relevant, and electricity rates) but with a variable sale price, like any commodity. I'm not saying that bitcoin IS a commodity, only that there are plenty of businesses already producing commodities and that Bitcoin's price volatility is not unique from a tax standpoint. It's true that at the lower income levels, tax authorities generally *likely* won't care. Bear in mind that lack of official enforcement activity is not the same as permission though.
This is a very good paragraph and one that should always be remembered given governments current stance on Bitcoins. I think this is what I was trying to get across in my previous statement, but was summed up very nicely here. It is very true that official enforcement is not the same as permission, and anyone who thinks otherwise is very liable for heavy fines and/or penalties.
I think the above two posts should be used in tandem as I am really only knowledgable in U.S. tax law, and bitcoinuser123 seems to have more knowledge of some other countries. But I will repeat it again as it is worth repeating because I very much so like the quote and is probably the best way to handle the taxation of bitcoin...
Lack of official enforcement activity is not the same as permission.
I would never advise anyone to try and defraud the government of any country. And to this point I would say that bitcoins are a taxable item when produced or traded for goods/currency.